Is Google Wallet the future of mobile payments, or nothing more than a money pit?

June 10, 2013
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    google wallet

    It has been two years since Google first introduced its “Wallet” service, offering its users an easy way to store credit/debit card information, as well as make purchases both offline and in-stores via their phones. In that time, the company has invested over $300 million just in acquiring digital startups to develop the app. They’ve also dedicated hundreds of developers to Wallet. Despite Google’s hard work, Google Wallet is still far from a household name and has only seen around 10 million downloads in the Google Play Store.

    So is Google’s Wallet just an endless money pit that has little hope of breaking into the mobile payment market in a big way? A new report from Bloomberg Businessweek seems to suggest the answer is “yes”.

    In the report, Businessweek points to a low level of adoption as the biggest issue. Google’s plans for Wallet don’t revolve around making money from transaction fees, the idea is to collect data on consumer habits and create targeted ads. Of course for that model to actually produce much revenue, there has to be people viewing said ads.

    So what’s the hold up, why isn’t Google Wallet dominating the mobile payment scene? The biggest reason is that the major U.S. carriers aren’t playing nice. It’s kind of hard to download and use the app when three out of four of the biggest carriers don’t support Wallet: Verizon, AT&T and T-Mobile. That leaves just Sprint users.

    With only Sprint allowing the use of Wallet, most retailers just don’t see the need to support it, which further discourages Android users from utilizing the payment solution.

    Why would AT&T, T-Mobile and Verizon block Google Wallet? The official reason is that they feel that granting access to Google Wallet involves potential security risks. Strangely enough, they don’t seem to have the same problem with the mobile payment service, Isis, which is supported by all three carriers.

    So what’s needed to turn the tide? Expanding to new countries or getting bigger U.S. carriers to support the service would certainly help. Google also needs to expand the appeal of Wallet through new services and features.

    Unfortunately, according to “more than half a dozen people close to the company”, Google is actually reconsidering or abandoning many of these kinds of projects. This includes the previously rumored Google Wallet card, which has reportedly been held back at the moment. Supposedly, no final decision on whether to permanently ditch the effort has been made just yet.

    So is really all doom and gloom for Google Wallet?

    Don’t worry folks, Google Wallet isn’t going anywhere. In May alone we saw Google Wallet get the ability to make one-click purchases and send money to friends over Gmail or through Wallet. Later that month, Google also announced that Google Wallet would be taking over for Checkouts.

    Google has big plans for Google Wallet, and isn’t afraid to spend a little money to realize its vision. Additionally, competing mobile payment platforms – such as Isis – aren’t exactly taking the world by storm. Google Wallet is far from dead. It may be two years old, but in many ways this is really just the beginning for Wallet.

    What do you think of Google Wallet, would you utilize it if your device/carrier/country supported it? Conversely, do you feel it is a money pit and that Google’s efforts might be better focused elsewhere?

    Comments

    • Prox

      It’s a shame Verizon T Mobile and ATT are killing this app. I use wallet all the time on my nexus. I find it safer to use because access is locked by a pin. Secondly the transaction is processes by a virtual card. Therefor my own credit card number is not being collected and possibly used for other fraudulent activities. Google should sue the big three phone companies. They are clearly blocking the app because they want to line their own pockets with ISIS

    • Tod Leamon

      I’d love to use wallet.. T-Mobile?!

    • Hothfox

      It’s a shame AT&T, Verizon, and TMobile are blocking it in favor of Isis. Isis is only in two cities right now, and only supports their own reloadable cards and three credit cards. Google Wallet, on the other hand, is available where ever Paypass is available, and supports most cards. So not only are they blocking a competitor, they’re keeping everyone in the dark ages.

    • Insp_Gadget

      The article doesn’t mention it, but Google Wallet is also available to Google Nexus users on any U.S. carrier. The only caveat is the Verizon Galaxy Nexus, which requires one to root their Nexus in order to use Google Wallet.

      Otherwise, Wallet is available and working on any GSM Nexus in the U.S. I use it all the time on mine with StraightTalk.

    • Brookz

      Come on already Google, release it to Canada!!!!

    • bC6

      I use Wallet at Walgreens. My only complaint is when WG had to credit a mistake it took a week to be posted to my account: the support person kept an email chain going.

      However, AMC theaters and other chains need this service. Many of their registers support Blink and other credit card style NFC services so adding Wallet should be a software and not hardware update to offer Wallet service.

      Google really needs to offer true partnership, sharing appropriate transaction data, with companies like Starbucks and the carriers that are expanding the use of NFC on phones for payments and services. So we clients then get more use out of our over priced service plans with our very capable phones: keep the plastic in the wallets and purses as backup or leave them at home.

      In the same vein, bank ATMs need to be accessible in the same way through NFC, maybe even Wallet, to gain access instead of pulling out the card.

      Enough businesses and other entities need to offer these NFC style services for our phones so end users get use to and demand availability.

      • Mordy Festinger

        Actually anywhere that is able to use blink can also use Google wallet.

    • SG

      Fala-se tanto Sobre a Wallet Google

      Gaston Schwabacher vai ficar na história como o inventor da
      Eletronic Wallet,

      proprietário dos Direitos Intelectual da Patente PI 9500345
      INPI Brasil, em 1995 antes mesmo do próprio Google existir .

      Gaston Schwabacher

      Estará entre os grandes criadores, inventores como:

      Bell, Da Vinci, Daimler, Edison, Volta, Watt … e muitos
      outros.

      Mas desfrutar dos dólares.

      Apenas Sergey Brin e Larry Page e outras corporações?

      Pelo que sabemos Gaston Schwabacher, ainda não recebeu seus royalty

      O que é de se estranha pelo perfil do Google e de seus
      criadores.

      De serem justos, honestos. Educação que vem de berço.

      “Não seja mau”

    • SG

      Fala-se tanto Sobre a Wallet Google

      Gaston Schwabacher vai ficar na história como o inventor da
      Eletronic Wallet,

      proprietário dos Direitos Intelectual da Patente PI 9500345
      INPI Brasil, em 1995 antes mesmo do próprio Google existir .

      Gaston Schwabacher

      Estará entre os grandes criadores, inventores como:

      Bell, Da Vinci, Daimler, Edison, Volta, Watt … e muitos
      outros.

      Mas desfrutar dos dólares.

      Apenas Sergey Brin e Larry Page e outras corporações?

      Pelo que sabemos Gaston Schwabacher, ainda não recebeu seus royalty

      O que é de se estranha pelo perfil do Google e de seus
      criadores.

      De serem justos, honestos. Educação que vem de berço.

      “Não seja mau”

    • Andrew

      Google, like Paypal is finding out that the mobile payment industry is much more difficult to penetrate than they may have thought. Security, speed, reliability, existing b2b relationships, brand, and credibility are key; and Visa has many advantages in these areas- if it can execute.

    • Fazendo Justiça

      Watch, see, share,

      http://youtu.be/lgL-iHBVF64

      Thanks for the space!
      Danke für den Raum!
      Спасибо за места!
      Obrigado pelo espaço!

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